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Past-due loan values skyrocket 121 percent.

Twenty-one banks doing business in Benton and Washington counties had a combined $313.8 million worth of loans on their books that were not accruing interest as of June 30.

According to uniform bank performance reports filed with the Federal Financial Institutions Examination Council, the collective value of loans in those banks' nonperforming columns are up 10.6 percent from the first quarter. That value excludes the $589.3 million of bad loans on ANB Financial's books before federal regulators shut it down on May 9.

If nonperforming assets from the area's three savings associations are included, the total value of loans not collecting interest as of June 30 is $342.48 million. Another thrift, Pulaski Bank & Trust, which purchased many of ANB's deposits and branches, was excluded because it has been doing business in the two-county market only since May.

Compared with the same period in 2007, past dues at area banks look bleak. In the second quarter of 2007--excluding ANB's loans and the three thrifts--the banks had a collective $141.5 million of loan value in non-accrual status, so the June 30 number represents a 121 percent increase in bad paper.

Of the 21 banks, only four had non-accrual ratios (excluding OREO) below 1 percent and nine had ratios above 2 percent.

When the non-accrual ratio includes other real estate owned, presumably most of which has been foreclosed upon, the spread is greater: Only two are less than 1 percent and 15 have 2 percent or more.

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Title Annotation:NW Journal: A Look at News From Northwest Arkansas
Author:Sparkman, Worth
Publication:Arkansas Business
Article Type:Brief article
Geographic Code:1U7AR
Date:Oct 6, 2008
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